Iran petrochemical sales still limited by sanctions

Iran’s petrochemical exports are still hampered by western sanctions even as an embargo on sales of the products are suspended during negotiations with global powers to limit the nuclear program.

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By GOLNAR MOTEVALLI

Bloomberg

Irans petrochemical exports are still hampered by
western sanctions even as an embargo on sales of the products
are suspended during negotiations with global powers to limit
the countrys nuclear program, an official said.

Transferring payments for sales and securing insurance for
exports remain the biggest hindrances for petrochemical
producers, said Mohammad-Hasan Peyvandi, vice president of
Irans National Petrochemical Company. He spoke in
an interview at his Tehran office.

There are problems with exporting petrochemicals, but they relate to
issues surrounding insurance, Peyvandi said. It
has gotten better. In the past three to four months,
weve had between 4-to-6 percent increases in production
and exports."

Chemical output rose from the 40.6 million tons and exports
from the 13 million tons achieved in the Iranian calendar
year through March 2014 due to better industry management,
economic conditions and lower inflation, he said.

Foreign investment in Irans chemical and energy
industry is restricted by western sanctions designed to
dissuade the Islamic republic from pursuing a nuclear program
the US and its allies say may lead to atomic-weapons technology. Iran, which says its
nuclear plans are peaceful, and six global powers have given
themselves until Nov. 24 to agree on limits to the nuclear
program in return for lifting sanctions.

Under the agreement governing the talks, insurers can
underwrite ships transporting Iranian goods and European and US companies can
again purchase Iranian petrochemicals. The short window
for sanctions relief -- initially meant to last only six
months before last month being extended another four to
November -- has made it harder to benefit from eased
restrictions on chemical sales and banking, Peyvandi said.

Irans planned $20 billion petrochemical hub at Chabahar on
its southeast coast may be open to foreign investment once
restrictions are lifted, Peyvandi said. The port has direct
access to the Arabian Sea and Indian Ocean and sits at the end
of a natural gas pipeline to Pakistan, across the border.

The country is investing to tap global markets and could
triple petrochemical production capacity to 180 million
metric tons, Deputy Oil Minister and National Petrochemical
President Abbas Sheri-Moqaddam said in an interview June 7.
Output at that level could bring in revenue of at least $90
billion, he said, without specifying a time frame for the expansion.

National Petrochemical, a branch of the Oil
Ministry, gives strategic direction to the industry. Foreign
companies have little involvement in domestic operations,
which is mainly operated by private firms, Peyvandi said.

Peyvandi said there have been no formal approaches from
foreign companies seeking to invest in the industry.

We havent insisted, he said. This is
so that a problem doesnt arise for anyone. Right now at
least the industry has reached a good level of
self-sufficiency.

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